Most people in the brand marketing circle will think about a question, that is, should brands invest in performance advertising or brand advertising at the moment? In this article, the author explores the difference between brand advertising and performance advertising.
Performance advertising or brand advertising?
This topic is one of the most controversial topics in the brand marketing circle in recent years, from the world's top 500 brands with a volume of tens of billions to small and medium-sized brands with a scale of hundreds of millions, not only the brand founder and marketing person in charge of Party A are concerned and weighed, but also the large and small media companies and large and small advertising companies of Party B are also controversing.
After many years of controversy, there is no clear and clear consensus conclusion, and even the difference between the two is rarely explained, and most companies still make decisions and allocate marketing budgets according to their own judgment and logic.
The problem here is both complex and complex, and simple and simple.
The complexity lies in the fact that brand companies in different industries and at different stages face different marketing (channel and media) problems, and the internal organizational structure is very different, which makes it difficult to achieve a clear logic of marketing budget allocation and result measurement.
In fact, as long as you understand the essence of performance advertising and brand advertising, and know what the essential difference between the two is, you will know how to allocate budgets and measure results based on your own business situation.
In fact, the definition of effect advertising and brand advertising is not precise enough, and the precise definition should be: effect exposure (advertising) = channel exposure, brand exposure (advertising) = media exposure
Performance advertising: The essence is to directly bring exposure to sales behavior or ROI returns, most of which are sales models with accurate crowds and bidding, and in the final analysis, channel traffic.
Brand advertising: The essence is that it cannot directly bring sales behavior or ROI return exposure, most of the marketing information is conveyed through pan-media, and it is the traffic brought by the media.
I have made this clear in the previous article (the underlying logic of Douyin is attached at the end of the article), the essential difference between channel exposure and media exposure, in addition to whether it can bear the complete transaction link, lies in the accuracy of the coverage of the crowd (more rigorously, the accuracy of the demand behind the crowd), and what determines the value of all media or channels is the accuracy and scale of the crowd behind the media or channel.
The media can be exposed, but the crowd is wide, and it needs to stimulate the purchase demand, and the transaction link cannot be completed, so the advertising fee for exposure is cheap.
The channel can be exposed, and the crowd is more accurate, probably with demand, and the transaction link can be completed, so the exposure channel is expensive.
To understand this with a simple example, it is easy to understand:
Whether it is Baidu search traffic or Taobao and Pinduoduo search traffic, these traffic are accurate channel traffic (performance advertising). Why? Because the people who come are probably already coming with purchase needs, they will search for keywords, and a lot of display results through keywords are essentially shelves, and there are many similar goods on the shelves that meet the needs, and users only need to screen and place orders on the shelves, and the transaction is completed.
In most cases, of course, brands prioritize finding ways to wipe out the channel traffic, such as optimizing the traffic conversion efficiency and monetization scale in their own categories, then most of the traffic in this shelf category can be eaten by you, because the channel should pursue the highest traffic monetization efficiency, and which brand can make the channel make more money with the same traffic will give it.
What if the company wants to grow further? There is so much traffic in the channel itself, and if it is a bidding case, the larger the traffic scale, the higher your cost will be, and the ROI will be lower. This is because the marginal cost of traffic has become higher, and some users don't want to choose you, and you need to reach it many times before you can convert it, and the conversion cost is much higher.
A more efficient action is to find users on mediums other than channels.
Because a user's attention is mostly in the medium, not in the channel (we have a limited time and frequency of exposure to the channel in a day);
Therefore, the greatest value of the channel is to undertake the transformation of user needs, and it is difficult to complete the stimulation of user needs.
The media is just the opposite, you advertise on the media to do marketing, the media itself for the carrying of diverse forms of information and the efficient transmission of information, is to a large extent able to stimulate user demand, that is, the core value of media advertising (stimulate user demand, remind users to buy, strengthen user trust, create spiritual experience, etc.), in one word to summarize that media advertising can complete the pre-sale of goods, planting grass is pre-sale.
When a user sees your ad on the media and then goes to the channel shelf to make a purchase, then the probability of choosing you is the largest.
So when this logic is clearly understood, what brands are suitable for media advertising?
1. The competition in the channel dimension has won alone, and the brand that has become the leader in category sales must do media advertising to expand the market in the education market.
(Here's an important point: while the cost of educating users is high, the benefits are higher, because the users you educate are probably choosing yours rather than other brands.)
2. When the second and third brands in the channel can't win the boss by relying solely on the competition of the channel itself, they want to be able to complete the pre-sale action on the media advertising outside the channel, so as to feed back the competition of the channel and overtake in the corner.
Without these two prerequisites, it is not recommended that brands advertise in the media, because the efficiency is not high enough, and the feedback power to the channel is limited.
Therefore, brand advertising is not suitable for brands at all stages, but if the brand's business volume reaches a certain stage and does not do brand advertising, it is likely to be difficult to continue to win the competition, and it will gradually weaken the competitiveness in the channel.
After the above understanding of the essential logic of performance advertising and brand advertising, let's briefly talk about how to allocate different types of advertising budgets for brands at different stages.
In the financial statistics, the sales expenses in the financial reports of general listed companies include channel fees and marketing fees, that is, the cost of channel traffic and the cost of media traffic, but the proportion of these two is extremely different in different industries.
(Put a network map to feel it)
For example, the traffic fee in the game industry accounts for an astonishing 93%, and the salary of personnel only accounts for 6%, which is commonly known as the purchase volume in the game industry;
For example, in the kitchen appliance industry, the channel cost is 40%, the advertising cost is 26%, and the staff salary is 14%, which is relatively balanced and healthy.
There are two essential determinants of the difference in the proportion of channel fees and advertising costs in different industries, the first is the industry attributes, and the second is the company's business cycle.
Industry attributes: Under the general law, the more consumer-resistant or long decision-making cycles, the lower the proportion of channel rates, and the higher the proportion of advertising costs.
Business cycle: The earlier the company, the smaller the company, the higher the proportion of channel rates and the lower the proportion of advertising.
For example, in the food and beverage industry, companies with an annual turnover of 100 million yuan are basically all channel fees, and very little market advertising expenses, to 1 billion, may account for 2-3% of sales, but the channel rate is generally 20-30%.
But when it comes to billions and tens of billions, sometimes the advertising fee is higher than the channel rate!
This essence is the question of whether the marketing expenditure is more efficient in the channel or more efficient in the media at different business stages.
Author: Mumu's Marketing Thinking, WeChat public account: Mumu's Marketing Thinking
This article was originally published by @木木的营销思考 on Everyone is a Product Manager. Reproduction without the permission of the author is prohibited
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